More precisely: It’s a great time to be a new-breed, highly professional rep
By Joseph Rini
It’s no secret that healthcare in America is changing faster than at any other time in our history. Our healthcare system has transformed itself in ways that were inconceivable just a few years ago. Needless to say, these changes have heavily impacted patients, clinicians, hospital systems and IDNs alike. This transformation has also altered the way medical product manufacturers and their representatives operate.
Some manufacturers still have contracted sales forces that have refused to embrace change, and they might argue that the rep profession is on its final leg. But my outlook – and that of many reps who have adapted to the new environment in healthcare – is optimistic. We believe that, when understood and handled effectively, change is directly proportional to opportunity. So, when considering the monumental developments presently taking shape in healthcare, the potential for growth and the formation of new relationships is probable. And those opportunities extend not only to the manufacturer and its reps, but also to the hospital systems that they serve.
A transformed landscape
Once upon a time, life was a lot more straightforward. Reps built relationships with distribution and/or clinicians, convinced them of their manufacturers’ value propositions and…voilà…a sale! Now, a large percentage of purchasing decisions have been taken out of the hands of befriended clinicians and are instead controlled by systemwide purchasing committees and GPO contracts. This, of course, is the result of the emphasis on spend reduction resulting from slashed third-party reimbursements necessitated by the Affordable Care Act.
Now, the onus of presenting a manufacturer’s value proposition falls solely on the shoulders of the manufacturer and its sales force. Not only must new-age reps provide solutions to the hospital and its supply chain executives, they must communicate the needs of providers back to the manufacturer – a task once done, in part, by the distributor rep, who in many cases has been consumed by account management obligations. Thus, independent reps that have adapted to their new environment are more essential figures in the supply chain, and have become invaluable to their manufacturers.
Who will live comfortably in the new territory?
Obviously, the new reps we’re describing are more sophisticated, more professional and more focused on the long-term than some of their predecessors. In the past, there was a breed of reps that followed the “more is better” way of thinking, simply piling up lines of business to fill their bank accounts. And if a line failed to produce – more often than not because of the rep’s inattention – they simply added another line to their repertoire. Those that have stigmatized this segment of our industry for too long, are very soon to become extinct.
New-age reps, on the other hand, are extremely selective about the lines they take on. They choose only those they know they can effectively sell, taking into consideration GPO contracts; or those whose manufacturers can, in their opinion, sustain the many changes yet to come. More than ever before, a rep’s reputation for professionalism and integrity is critically important. That, in turn, has made credentialing a vital indicator of a rep’s expertise and commitment to the future of healthcare for both manufacturers and purchasing organizations. Any reps that shun credentialing are almost certain to go the way of the dinosaur, as IDNs continue to consume practically all of the healthcare landscape.
So the independent reps left standing are uniquely qualified individuals, often with years of experience and thousands of contacts. They know their regions like the proverbial backs of their hands, and they have a clear view and deep understanding of both manufacturers and the distribution channel. Chances are, they’ve toured hundreds of factories, while at the same time learning to speak the language and understand the needs of today’s healthcare systems. They adeptly walk the line between the two worlds, constantly keeping an eye on changing conditions in both. And the new-age rep is likely to be part of an organization that effectively uses up-to-date technology to further expand effectiveness.
Opportunities on both sides
It’s a great time to be a rep. Let me modify that: It’s a great time to be a new-breed, highly professional rep. We know that, due to consolidation, the number of IDNs and healthcare systems has been and will continue to be reduced. That might seem to make it difficult for a rep to build business: after all, fewer potential customers usually means fewer opportunities.
But there is actually room for tremendous, almost unlimited, business growth within hospital systems and IDNs. As we know, some systems have grown to monumental proportions, and a good rep can grow right along with them. And here’s the really good news: A good rep can easily and efficiently build on a single call point in a system, as standardization is the ultimate goal.
The opportunity on the other side of the fence – for hospitals and healthcare systems – can be just as dramatic. During this time of overwhelming, often totally disruptive change, systems need all the help they can get. They will find that independent reps have one foot on each side of the new geography, and are acknowledged experts in sourcing products. The new-age rep is a central figure in the transformed manufacturing/distribution model, and can help systems reduce time, trouble and expense by finding exactly the products they need, exactly when they need them.
Additionally, because an independent manufacturers rep represents a number of vendors, he or she can put products together to create just the combination a system may be seeking. Over the years, hospitals have often relied on distributor reps to find them the products and the product combinations that they seek. You might say that to a healthcare system, the value of an effective independent rep is one of their best-kept secrets.
Getting better all the time
I believe that the new equation – with reps at the center – provides an endless list of new opportunities for reps, manufacturers, and healthcare systems. This is especially true of reps who bring an expanded scope of representation to the table. Manufacturers can gain valuable information by better understanding the needs of healthcare systems; healthcare systems will benefit by being able to tap into the multi-dimensional expertise of reps; and reps will have unbounded opportunities for growth, possibly in some unexpected areas.
Some industry experts have predicted that end users (hospital systems) will begin to contract with reps to more formally use their expertise in sourcing and relationship-building with manufacturers that are open to more direct relationships with them. In that way, reps will not only be selling products, they will become service providers. And it’s no surprise that, as the medical representation industry matures, it will move in that direction. The IT (information technology) industry is one example of an industry that has learned the value of its professionals’ knowledge bases, with many companies that once focused on selling hardware now concentrating more on marketing expert services.
So, forget everything you’ve heard about the decline of the medical representation industry. If you’re part of a healthcare system, you couldn’t find a better ally in this period of change than the new breed of independent manufacturers reps. And if you’re a rep hungry for success and know the meaning of professionalism, you’re in the right place at exactly the right time.
Editor’s note: Joseph Rini Consulting has a long history of developing successful healthcare product manufacturers. Visit www.riniconsulting.com